An Empirical Study On The Relationship Between Executive Compensation And Performance In Chinese Commercial Banks

With the deepening of China’s reform and opening up, the market economic reform has made remarkable achievements, and the separation of ownership and management rights is introduced to Chinese enterprises. As the corporate senior managements control enterprise resource, their compensation receives extensive attention of people. Compared with the common enterprises, currency is the most special commodity that banks run. It’s the reason why we need to consider its particularity while formulating executive compensation. In recent years, market-oriented reform of commercial banks have been promoted, meanwhile the executive compensation of banks’management has been changed to market-oriented way. Especially, with the continuous improvement of the operating performance in commercial banks, the executive compensation shows obvious growth trend. Therefore, it becomes a hot topic whether the executive compensation can afford effective incentive, and promote the performance of banks.Until now, the coexistence of the banking market structure has been basically formed various types. The large state-owned commercial banks become the main body, national joint-stock commercial banks become a new growth power, and the city commercial banks become the complement. In the past few years, the commercial banks system in China has been rapidly developed, and the banking marketization reform has been obtained significant effect. There are 16 banks list in Shanghai and Shenzhen stock exchange and HongKong Stock Exchange, and other banks actively do preparatory work. With a large number of major commercial banks have been listed, performance salary system in our commercial banks has been preliminarily established. In order to reform the current executive compensation system and improve overall efficiency of banks, we need to study on the relationship between executive compensation and the performance of Chinese commercial banks. This paper chooses the a-share listed 16 commercial banks data in 2007-2013 as the research sample, and the executive compensation and operating performance of commercial banks in China as the research object. Then this paper comprehensively evaluates the present situation in the executive compensation system of our country commercial banks. At last, it makes an empirical study on the correlation between executive compensation and operation performance of our country commercial banks via theoretical and empirical analysis.